Publishing & Broadcasting Limited

Publishing and Broadcasting - $6.30: The company has taken up its option to pay $160m to buy half of News Ltd's 50% stake in Foxtel. It's now expected to follow this by exercising its option to acquire half of NCP's 50% stake in Fox Sports. While any business arrangement between the 2 media moguls is likely to be a fiery one, Kerry Packer would not have taken up the option without good reason. It gives PBL a head start on the other free to air broadcasters in Australia and access to an enlarged content library and Murdoch-owned sporting events. This will make life very difficult for the combined pay-TV aspirations of Cable & Wireless Optus and the Seven Network. Since last reviewed on September 25 (Hold-$6.00), PBL's share price has held up well but for the time being we will retain our HOLD recommendation due to concerns over the impact of a slowing economy on PBL's earnings.